Buying commercial real estate isn’t something that can be done with just a few clicks of a button. Since there is oftentimes a lot of money involved and many legal aspects that need to be reviewed and managed, commercial acquisition is typically measured in weeks and months. So if you’re considering dabbling in the world of commercial real estate or switching up your current investment holdings, what type of acquisition timeline can you expect to be working with? In today’s blog, we explain which factors influence how long a commercial real estate transaction takes.
How Long Will Your Commercial Real Estate Transaction Take?
There’s no way to give a one-size-fits-all answer to the above question. The process of acquiring commercial real estate requires much more investigation than the process of buying something off Facebook Marketplace, and for good reason. There is oftentimes significant financial risk involved if you overlook something during the purchasing process, so you need to take your time to ensure there are no surprises when working to come to an agreement with a seller.
Some of the factors that can influence how long a commercial real estate transaction takes include:
-
Property Discovery - Sometimes you happen across a commercial property that you’re interested in, while other times it takes months or even years of looking before something catches your eye. Finding the right property can take time, or it can happen in short order.
-
Negotiation - Once you’ve found a property you want to acquire, you’ll enter the negotiation stage with the buyer. Here is where you’ll come to a tentative agreement on price alongside other important details of the transaction. Again, this can move slowly or relatively quickly depending on how flexible each party is and their personal interests.
-
Due Diligence - Once you’ve reached an agreement to purchase a property, you will enter what’s known as the due diligence stage. A specific amount of time will be set for certain investigations and inspections to take place. The due diligence period length will depend on the scope of the inspections that need to take place, and your acquisition timeline will obviously be extended in the event that repairs need to be made or issues need to be addressed.
-
Financing And Closing - Finally, once due diligence has been completed, you will make any necessary adjustments to the contract. If both sides still agree, you will enter the financing and closing stage of acquisition. This period can take a number of months depending on how funding needs to be secured, as financiers will need to do their investigation to ensure they are protected if they end up providing capital for a purchase.
It can take months or years to complete a commercial real estate acquisition, and while you never want to rush into a major financial commitment, you can work to speed up the acquisition process by connecting with a title service provider like Commercial Partners. We can help with negotiations, contract writing and due diligence investigation to ensure these processes are performed quickly, correctly and with your best interests at heart. Let us help protect your interests and keep the acquisition process on track. For more information about any of the above aspects of commercial real estate acquisition, or for help with your next commercial purchase, reach out to the team at Commercial Partners today at (612) 337-2470.